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Mortgage Lawsuits News | Mortgage Litigation Index
Mortgage industry lawsuit news and mortgage litigation coverage. Stories about legal settlements, judgments and mortgage class actions.


Foreclosure Lawsuits Push Mortgage Litigation Index Higher

Second-Quarter 2011 Mortgage Litigation Index 190

Sept. 26, 2011

By MortgageDaily.com staff


The Mortgage Litigation Index from MortgageDaily.com climbed to its highest level during any quarter since it was introduced in 2007. Cases challenging the foreclosure process accelerated, though investor actions were higher and criminal activity shot up.

The Second Quarter 2011 Mortgage Litigation Index came in at 190 total cases. Activity grew 26 percent from the prior quarter and was well more than double the level a year earlier.

The report, which reflects mortgage-related legal actions covered by MortgageDaily.com between April 1 and June 30, was prepared in conjunction with Patton Boggs LLP.

There were more cases related to foreclosures than any other category. Foreclosure litigation, which involves rulings in favor of borrowers or cases against rescue firms, was up two-thirds from the first quarter.

Litigation involving mortgage servicers, which often goes hand-in-hand with foreclosure activity, was a third higher.

One area worth noting is secondary marketing, which more than doubled to 27 cases in the latest period. This category reflects repurchase activity.

"Foreclosure litigation is on the rise as borrowers are increasingly challenging foreclosures because mortgagees continue to struggle proving mortgage ownership," says Dallas Partner Pat McManemin. "Repurchase and secondary market litigation is also increasing as institutions fight over responsibility for the substantial losses suffered by the holders of these loans."

There was a 63 percent rise in criminal cases.Top Litigation Categories*
Category Q2 2011 Q1 2011 Q2 2010
Total 190 151 75
Foreclosure 67 46 29
Servicing 65 49 9
Investor 50 42 26
Criminal 44 27 11
Regulatory 30 7 0
*Category totals don't add up because many
cases were counted in more than one category.


Lawsuits that allege mortgage compliance violations more than quadrupled from the first quarter.


Second Quarter 2011 Mortgage Litigation Index
Case Count by Type & Quarter

Category
Description
Q2 2011 Q1 2011 Q4 2010 Q3 2010 Q2 2010 Q1 2010 Q4 2009 Q3 2009 Q2 2009 Q1 2009
Q4 2008
Q3 2008
Q2 2008
Q1 2008
Full Year 2007
Total Total Cases Tracked (some cases tracked in multiple categories) 190 151 151 106 75 155 134 76 125 81 46
Advertising Lawsuits about mortgage advertising, bait and switch ads, deceptive ads and do-not-call violations. 0 4 4 2 2 4 13 18 9 4 7
8
2
1
5
Appraisals Litigation related to real estate appraisals, pressuring appraisers and appraisal fraud. 2 1 0 0 1 2 0 2 11 2 1
3
0
0
5
Bankruptcy- Consumer Legal issues surrounding borrowers who file for bankruptcy, including servicing bankrupt borrowers. 4 5 3 3 2 6 2 2 1 0 0
1
2
8
5
Bankruptcy- Corporate Litigation surrounding companies that file for bankruptcy protection or bankruptcy liquidation 1 3 5 6 4 9 7 9 8 2 4
5
3
0
0
Commercial Mortgage Cases related to commercial mortgage lending. 2 1 1 0 0 4 1 2 1 1 0
0
0
0
1
Commitments Loan commitment litigation. 0 0 0 0 0 2
0
0
0
0
0
0
0
0
0
category
description
Q2 2011 Q1 2011 Q4 2010 Q3 2010 Q2 2010 Q1 2010 Q4 2009 Q3 2009 Q2 2009 Q1 2009
Q4 2008
Q3 2008
Q2 2008
Q1 2008
full-year 2007
Compliance Lawsuits and actions tied to violations of mortgage regulations. 22 5 4 0 0 7 4 3 5 8 6
3
1
5 (RESPA),
6 (TILA)
Copyright Lawsuits about copyright, trademark and intellectual property issues. 0 0 0 1 1 2 1 0 0 2 0
1
0
0
3
Credit Litigation based on credit reporting and other credit issues. 0 1 0 2 3 1 9 5 0 3 0
1
2
3
3
Criminal Cases involving criminal complaints. 44 27 26 17 11 24 11 4 5 0 0 0 0 0 0
Discrimination Class actions and lawsuits related to lending discrimination involving minorities, neighborhoods and property types. 12 1 1 1 1 2 2 1 5 5 2
2
3
2
category
description
Q2 2011 Q1 2011 Q4 2010 Q3 2010 Q2 2010 Q1 2010 Q4 2009 Q3 2009 Q2 2009 Q1 2009
Q4 2008
Q3 2008
Q2 2008
Q1 2008
full-year 2007
Down Payment Assistance Cases about the legality of DPA programs and HUD's ability to prohibit them. 0 0 0 0 0 0 0 1 0 0
0
0
0
1
2
Embezzlement Legal actions on mortgage-related embezzlement. 5 4 5 4 0 3 2 0 1 0 1
1
1
0
0
Employment Employment lawsuits involving overtime, employment discrimination and employment contracts. Whistleblowers and WARN notice violation cases also. 9 11 8 12 3 8 3 4 3 4 3
0
2
6
Fees Lawsuits involving excessive fees, servicing fees and loan fees beyond state maximums. 5 6 2 0 2 2 0 0 0 1 4
8
1
2
Foreclosures Servicer-related litigation, foreclosure lawsuits and cases against foreclosure rescue services. 67 46 40 21 29 33 17 10 26 12 3
7
6
9
category
description
Q2 2011 Q1 2011 Q4 2010 Q3 2010 Q2 2010 Q1 2010 Q4 2009 Q3 2009 Q2 2009 Q1 2009
Q4 2008
Q3 2008
Q2 2008
Q1 2008
full-year 2007
HELOC Cases related to home-equity lines-of-credit 0 1 1 0 0 0 0 0 4 0 0 0
0
0
0
Insider Trading Criminal cases about mortgage executives accused of trading securities based on insider information. 1 0 0 0 0 0 0 1 1 0 0
0
0
0
2
Investor Shareholder lawsuits and class actions accusing companies of inflating earnings, overstating capital position or otherwise deceiving investors in the company. Other shareholder issues. 50 42 46 23 26 38 18 11 31 21 11
9
Leads Litigation about mortgage leads. 2 0 0 1 0 1 1 2 0 2 0 0
0
0
0
Licenses Regulator lawsuits and actions against improperly licensed and unlicensed mortgage companies. 1 0 6 4 1 1 4 0 5 0 1
8
2
1
2
category
description
Q2 2011 Q1 2011 Q4 2010 Q3 2010 Q2 2010 Q1 2010 Q4 2009 Q3 2009 Q2 2009 Q1 2009
Q4 2008
Q3 2008
Q2 2008
Q1 2008
full-year 2007
MBS Lawsuits related to mortgage-backed securities. 26 19 22 12 13 26 17 4 16 13 4
0
0
0
2
Mergers Lawsuits relating to mergers and acquisitions. 0 0 1 0 0 1 0 1 0 3 0
0
0
0
1
Military Actions involving military borrowers (added to report in Q2 2011). 2 2 0
0
0
0
1
0
0
0
1
0 0
0
0
Modifications Actions tied to loan modifications and modification firms. 19 24 37 12 6 15 61 30 22 0
0
0
0
0
0
Mortgage Fraud Big cases involving mortgage fraud, flipping, identity theft and inflated appraisals where a lender employee is involved. 10 12 7 5 5 10 11 3 11 5 5
7
3
Mortgage Insurance Lawsuits tied to mortgage insurance. 1 1 1 0 0 24 4 0 2 2 0 0 0 0 0
category
description
Q2 2011 Q1 2011 Q4 2010 Q3 2010 Q2 2010 Q1 2010 Q4 2009 Q3 2009 Q2 2009 Q1 2009
Q4 2008
Q3 2008
Q2 2008
Q1 2008
full-year 2007
Net Branch Litigation involving net branch operations. 0 0 0 0 0 0 0 0 5 0 1
1
0
1
0
Predatory Lawsuits and regulatory actions against predatory lenders. 0 1 4 2 1 6 3 1 6 3 4
7
3
0
7
Preemption Lawsuits about federal regulatory preemption over state regulation. 0 0 0 0 0 0 0 0 1 0 1
1
3
0
1
Privacy Lawsuits about privacy issues. 0 1 0 0 0 1 1 0 0 4 3
1
1
0
3
Regulatory Lawsuits by or against regulatory agencies. 30 7 1 6 0 0 0 1 0 0 0 0 0 0 0
category
description
Q2 2011 Q1 2011 Q4 2010 Q3 2010 Q2 2010 Q1 2010 Q4 2009 Q3 2009 Q2 2009 Q1 2009
Q4 2008
Q3 2008
Q2 2008
Q1 2008
full-year 2007
Reverse Mortgages Litigation tied to home-equity conversion mortgages and reverse mortgage issues, programs and lenders. 1 1 2 0 0 3 0 0 0 1 0 0 0 0 0
Secondary Marketing Cases related to secondary marketing, warehouse lending and repurchases. 27 11 15 8 3 4 4 2 5 5 3
3
9
Servicing Litigation related to loan servicing, including escrow issues, transfer of servicing and servicing borrowers in bankruptcy and foreclosure. 65 49 26 5 9 3 6 3 2 6 3
3
2
6
Suitability Lawsuits about mortgage company liability in determining suitability of loans for borrowers. 0 1 0 0 0 2 1 0 1 1 3
0
0
0
1
Technology Lending technology issues litigated. 0 0 1 0 1 2 1 2 0 0 0
1
1
1
2
Title Litigation tied to property title and title insurance claims. 6 8 2 5 3 1 0 0 0 0 0 0 0 0 0
YSP Litigation centered around yield spread premiums and YSP disclosures. 1 0 1 1 1 0 0 1 2 0 1
0
0
0
4
Total Total Cases Tracked (some cases tracked in multiple categories) 190 151 151 106 75 155 134 76 125 81 46
category
description
Q2 2011 Q1 2011 Q4 2010 Q3 2010 Q2 2010 Q1 2010 Q4 2009 Q3 2009 Q2 2009 Q1 2009
Q4 2008
Q3 2008
Q2 2008
Q1 2008
full-year 2007


*several cases were counted in multiple case types


Second-Quarter 2011 Mortgage Litigation Index 190


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